Circular Business Models: Bridging the Gap in the Apparel Sector

In the past two decades, we have seen a dramatic decrease in the number of times clothes are worn. According to Amsterdam based Circle Economy, the shift towards fast fashion has meant that today’s average consumer buys 60% more items than they did 15 years ago and wear them for half as long. They also state that 70% of closets usually go unworn, and it is estimated that 33% of women wear items as little as five times before disposing of them. It is these kinds of numbers that are driving fashion businesses to look into adopting more circular business models for apparel manufacturers

Rewriting The Rules of the Fashion System 

Utilized in four different market segments – value, mid-market, premium, and luxury, there are currently three recognized circular business models- rental, subscription-rental and re-commerce. The 3 circular business models are being adopted by businesses like Swedish fashion retailer Lindex and menswear brand Asket. This week the two fashion companies announced that they have joined Circle Economy’s Switching Gear project so they can explore how they can adopt a more circular business model. 

Switching Gear is a C&A Foundation-supported project designed to guide six brands on a circular innovation process towards the design and launch of rental and re-commerce business model pilots by 2021. As one of the four global projects supported by the C&A Foundation, Switching Gear aims to accelerate circular business models in the apparel industry. Asket and Lindex are the first of four brands to join Circle Economy’s Switching Gear project.

When it comes to the appeal of circular business models such as re-commerce and rental, is that they offer commercial opportunities. On this Gwen Cunningham, Circle Textiles Programme Lead, explains: “Circular business models such as re-commerce and rental offer commercial opportunities for brands to innovate their business model while optimizing the useful life of clothes to their full potential and reducing the overall impact of the industry.” Adding: “With Switching Gear, we aim to accelerate these business models in the apparel industry by providing brands with the expertise they need and connecting them with the right partners to successfully launch a pilot by 2021.”



Working Towards an Inclusive, Fair and Sustainable Industry

With change being demanded more and more by conscious consumers, it comes as no surprise that brands like Lindex and Asket are facilitating innovative technologies to their business model to reduce the overall impact of the industry. “We want to continue to lead by example and see that a re-commerce or rental business model would allow us to take our mission to change the way we consume clothes and reduce waste even further. Joining Switching Gear will fast track our thinking, and we are excited for the collaboration opportunities that come with the Switching Gear Enabling,” confessed August Bard-Bringeus, Co-founder at Asket.

So far, the project has built a network of over 30 rental and re-commerce experts and service providers who have been roped in to support participating brands, like Asket, develop and pilot a new business model. Members of the network include ThredUP, RePack, Eileen Fisher, Style Lend, Lizee, and The Renewal Workshop. Also, Circle Economy is collaborating with Amsterdam based Fashion for Good, a global initiative and platform that opened the world’s first interactive tech museum dedicated to sustainable fashion innovation. 

With the focus placed on putting the care back into apparel, Asket is addressing how clothes are made, marketed and consumed by introducing a collection of zero-compromise garments, and ensuring that every piece is marked with its traceability journey. They have placed importance on the need to break down the garment into its raw components, so it is possible to trace garments back to their origin. 

As for Lindex, the Swedish fashion retailer’s circular business approach is all about ensuring that 100% of Lindex materials are either recycled or sustainably sourced by 2025. “We want to prolong the lifetime of our products and use resources in the smartest way possible throughout our operations,” says Anna-Karin Dahlberg, Corporate Sustainability Manager at Lindex. Dahlberg continues: “A circular business approach will help us with our goals to reduce material streams and sending zero waste to landfill, and the guidance of the Switching gear project team will be of great value in our work to fulfill our promise to future generations.” 

With so much going on when it comes to sustainable fashion, I do think that the key takeaway for fashion businesses should be that the implementation of circular business models could help them turn their principles into practical reality. It offers the kind of change that promises to improve economic, social and environmental prosperity without compromising the future of the planet. Now as part of Circle Economy’s membership community, Lindex and Asket will be working with cities, governments, CSOs, NGOs, advisory boards and intergovernmental bodies.  


Written by Muchaneta Kapfunde

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